The banking industry is undergoing challenges and the commercial banks, at least FNB Botswana, have accepted the challenges as the new normal, the bank CEO Steve Bogatsu said on Monday.

The industry’s challenges are underpinned by factors such as low interests rates, and a two-year moratorium on bank charges imposed by the regulator, Bank of Botswana (BoB). Bogatsu said as a result of the moratorium, fees and commissions have remained under pressure.

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Speaking at the presentation for the bank’s financial results for the year-ended 31 June 2015, Bogatsu said they continue to face challenges as an entity and the industry as whole and expectation are that they will continue to face such, hence the “new normal”.

Bogatsu hinted that going into the future they expect their market share to be impacted as new entrants penetrate the market. As announced few weeks ago cautioning investors about expected reduced profits for the year, FNBB has released its financial results showing 18 percent decrease in profit after tax, from P719.6 million in June 2014 to P591.4 million this year.

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The bank was able to grow its Non-Interest Income (NII), which grew by nine percent from the previous period. The NII has grown from P794.5 million to P862 million in 2015, largely due diversification efforts according to Bogatsu.

FNBB registered an increase of four percent on interest revenue which was driven by growth in advances together with growth in investment securities. In terms of impairments, the bank says despite efforts put in place to strengthen collections strategies, the impairments still rose by 64 percent, which is said to be reflective of both consumer strain and the ailing property market.

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Against the backdrop of subdued economic expectations, FNBB says it remains confident that opportunities still exist in selective markets.